Shadow Price of Resources
Updated 2026-09-11
INTRODUCTION
English translation pending.
CORE DEFINITION
In optimization and linear programming, the shadow price is the improvement in the objective function if a constrained resource were relaxed by one unit, obtained from the dual variable at the optimum. The core proposition is that a resource's true economic value inside the system is its marginal contribution, not its accounting cost, and the key qualification is that the value holds only near the current constraints.
SCAFFOLDING EFFECT
Reduce cognitive load
- Model build: state the objective and the constraints that bind it. - Dual read: read the dual variables after solving to get each resource's marginal worth. - Priority rank: invest first in the resource whose shadow price is highest.
Anchor fast decisions
Market prices reflect what a resource costs to buy, while the system's optimum improves only by the marginal amount a resource contributes. The dual variable computes exactly that marginal value at the current optimum, so it ranks bottlenecks by true economic contribution and shows where the next unit of investment pays.
MINIMUM ACTION
In progress 0/1Practice this model in one real situation:
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Source support: Explicit
- en.wikipedia.orghttps://en.wikipedia.org/wiki/Shadow_priceverified
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